Question 1

A cash budget has value only if you use it and keep careful records of actual income and expenses.

Accepted Answer

A) True 
 B)False

Question 2

Jamie wants to have $1,000,000 for her retirement in 25 years. How much should she save annually if she expects to earn 10% on her investments?

Accepted Answer

In the financial calculator, i

Question 3

Which of the following ratios indicates your ability to pay current debts with existing assets that can be converted to cash quickly?

Accepted Answer

A)  Solvency 
B)  Liquidity 
C)  Cash 
D)  Savings 
E)  Debt service 
A)  Solvency 
B)  Liquidity 
C)  Cash 
D)  Savings 
E)  Debt service

Question 4

When estimating income for the income and expense statement, you should:

Accepted Answer

A)  use gross income. 
B)  include expected pay increases. 
C)  adjust expenses for inflation. 
D)  use net income less capitalized interest. 
E)  include the value of any assets purchased. 
A)  use gross income. 
B)  include expected pay increases. 
C)  adjust expenses for inflation. 
D)  use net income less capitalized interest. 
E)  include the value of any assets purchased.

Question 5

An income and expense statement provides a measure of financial performance over time.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements regarding an individual's net worth is true?

Accepted Answer

A)  It is the sum of an individual's current assets and his or her current liabilities. 
B)  It is the sum of an individual's take-home pay and his or her payroll taxes. 
C)  It is the difference between an individual's current assets and his or her current liabilities. 
D)  It is the difference between an individual's monthly income and his or her expenses. 
E)  It is the difference between an individual's total assets and his or her total liabilities. 
A)  It is the sum of an individual's current assets and his or her current liabilities. 
B)  It is the sum of an individual's take-home pay and his or her payroll taxes. 
C)  It is the difference between an individual's current assets and his or her current liabilities. 
D)  It is the difference between an individual's monthly income and his or her expenses. 
E)  It is the difference between an individual's total assets and his or her total liabilities.

Question 7

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
The [ Fisher equation  | rule of 72 ] is a useful formula for estimating about how long it will take to double a sum at a given interest rate.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 8

Which of the following is listed as an asset on an individual's balance sheet?

Accepted Answer

A)  Bank credit card balances 
B)  Education loans 
C)  Outstanding medical bills 
D)  Checking accounts 
E)  Leased automobiles 
A)  Bank credit card balances 
B)  Education loans 
C)  Outstanding medical bills 
D)  Checking accounts 
E)  Leased automobiles

Question 9

I should record _____ on my income and expense statement for the period of January 1 to June 30.

Accepted Answer

A)  an $800 refrigerator I bought on credit on May 30 
B)  an outstanding education loan account 
C)  jewelry I purchased with an arrangement to pay later 
D)  my checking account balance 
E)  the groceries I bought and paid for in June 
A)  an $800 refrigerator I bought on credit on May 30 
B)  an outstanding education loan account 
C)  jewelry I purchased with an arrangement to pay later 
D)  my checking account balance 
E)  the groceries I bought and paid for in June

Question 10

When your assets exceed your liabilities, you:

Accepted Answer

A)  are losing equity. 
B)  have a negative net worth. 
C)  are solvent. 
D)  are bankrupt. 
E)  have more real assets than investments. 
A)  are losing equity. 
B)  have a negative net worth. 
C)  are solvent. 
D)  are bankrupt. 
E)  have more real assets than investments.

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
If your expenses exceed your income, the bottom line of your income and expense statement will show a cash [ surplus | deficit ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 12

Which of the following statements regarding an individual's income and expense statement is true?

Accepted Answer

A)  An income and expense statement describes your financial position at a given point in time. 
B)  An income and expense statement looks forward in time to control spending. 
C)  An income and expense statement identifies your financial goals. 
D)  An income and expense statement measures your financial performance over time. 
E)  An income and expense statement can be used to predict inflation and interest rates. 
A)  An income and expense statement describes your financial position at a given point in time. 
B)  An income and expense statement looks forward in time to control spending. 
C)  An income and expense statement identifies your financial goals. 
D)  An income and expense statement measures your financial performance over time. 
E)  An income and expense statement can be used to predict inflation and interest rates.

Question 13

Loans should be recorded as a liability on the balance sheet at their _____ outstanding balance.

Accepted Answer

A)  original 
B)  year-end 
C)  average 
D)  current 
E)  beginning 
A)  original 
B)  year-end 
C)  average 
D)  current 
E)  beginning

Question 14

When your liabilities exceed your assets, you:

Accepted Answer

A)  are bankrupt. 
B)  have growing equity. 
C)  have a positive net worth. 
D)  are insolvent. 
E)  have less real assets than investments. 
A)  are bankrupt. 
B)  have growing equity. 
C)  have a positive net worth. 
D)  are insolvent. 
E)  have less real assets than investments.

Question 15

Investment assets are acquired to :

Accepted Answer

A)  be used in our everyday lives. 
B)  increase productivity. 
C)  provide a service. 
D)  earn a return. 
E)  be easily converted to cash. 
A)  be used in our everyday lives. 
B)  increase productivity. 
C)  provide a service. 
D)  earn a return. 
E)  be easily converted to cash.

Question 16

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
Earnings received as wages, salaries, bonuses, commissions, interest and dividends, or proceeds from the sale of assets are known as [ income | equity ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 17

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
A deficit on your income and expense statement will have [ an | no ] effect on your personal balance sheet.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 18

Which of the following portions of a mortgage loan is recorded as a liability on the balance sheet?

Accepted Answer

A)  Interest only 
B)  Sum of the interest paid and the outstanding balance 
C)  Sum of the interest due and the outstanding balance 
D)  Outstanding principal portion only 
E)  Principal portion and interest paid 
A)  Interest only 
B)  Sum of the interest paid and the outstanding balance 
C)  Sum of the interest due and the outstanding balance 
D)  Outstanding principal portion only 
E)  Principal portion and interest paid

Question 19

_____  value is the value today of an amount to be received in the future.

Accepted Answer

A)  Present 
B)  Future 
C)  Intrinsic 
D)  Extrinsic 
E)  Actual 
A)  Present 
B)  Future 
C)  Intrinsic 
D)  Extrinsic 
E)  Actual

Question 20

Which of the following is one of the three stages in preparing a cash budget?

Accepted Answer

A)  Calculating financial ratios 
B)  Forecasting expenses 
C)  Calculating depreciation expenses 
D)  Finalizing the balance sheet 
E)  Preparing the bank reconciliation report 
A)  Calculating financial ratios 
B)  Forecasting expenses 
C)  Calculating depreciation expenses 
D)  Finalizing the balance sheet 
E)  Preparing the bank reconciliation report

A cash budget has value only if you use it and keep careful records of actual income and expenses.

Jamie wants to have $1,000,000 for her retirement in 25 years. How much should she save annually if she expects to earn 10% on her investments?

Which of the following ratios indicates your ability to pay current debts with existing assets that can be converted to cash quickly?

When estimating income for the income and expense statement, you should:

An income and expense statement provides a measure of financial performance over time.

Which of the following statements regarding an individual's net worth is true?

Which of the following is listed as an asset on an individual's balance sheet?

I should record _____ on my income and expense statement for the period of January 1 to June 30.

When your assets exceed your liabilities, you:

Which of the following statements regarding an individual's income and expense statement is true?

Loans should be recorded as a liability on the balance sheet at their _____ outstanding balance.

When your liabilities exceed your assets, you:

Investment assets are acquired to :

Which of the following portions of a mortgage loan is recorded as a liability on the balance sheet?

_____ value is the value today of an amount to be received in the future.

Which of the following is one of the three stages in preparing a cash budget?

Understanding the Financial Planning Process

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds and Real Estate

Planning for Retirement

Preserving Your Estate

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Exam 2: Developing Your Financial Statements and Plans

A cash budget has value only if you use it and keep careful records of actual income and expenses.

Jamie wants to have $1,000,000 for her retirement in 25 years. How much should she save annually if she expects to earn 10% on her investments?

Which of the following ratios indicates your ability to pay current debts with existing assets that can be converted to cash quickly?

When estimating income for the income and expense statement, you should:

An income and expense statement provides a measure of financial performance over time.

Which of the following statements regarding an individual's net worth is true?

Which of the following is listed as an asset on an individual's balance sheet?

I should record _____ on my income and expense statement for the period of January 1 to June 30.

When your assets exceed your liabilities, you:

Which of the following statements regarding an individual's income and expense statement is true?

Loans should be recorded as a liability on the balance sheet at their _____ outstanding balance.

When your liabilities exceed your assets, you:

Investment assets are acquired to :

Which of the following portions of a mortgage loan is recorded as a liability on the balance sheet?

_____ value is the value today of an amount to be received in the future.

Which of the following is one of the three stages in preparing a cash budget?

Understanding the Financial Planning Process

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds and Real Estate

Planning for Retirement

Preserving Your Estate

Filters